Nightmare on Meme Street: Uncertainty, fiscal cliffs, and grand bargains

When, for example, it comes to the year-end expiration of the tax cuts that were originaly scheduled to be eliminated at the end of 2010 (until President Obama yielded to the GOP and extended them for two years), people will begin to learn whether having to pay taxes at Clinton-era rates is such a disaster after all, or whether we can live quite well with those rates.  Surely the wealthy will get on just fine; perhaps middle class taxpayers will as well.

Maybe, forced to choose, the Pentagon will offer up one of the many weapons program that actually isn’t necessary in an era where the U.S. retains overwhelming military superiority (and spends overwhelmingly more on the military than any country, too).

For those who insist that January 1 is a drop-dead date, there is a silver lining. R. Glenn Hubbard, the Columbia Business School Dean and advisor to Mitt Romney, was recently reported to have described the “fiscal cliff” as the number one source of corporate uncertainty, even above the debt crisis in Europe. Once we’re past January 1 and over the cliff, corporate leaders will touch themselves, see that they are still very much alive, assess the facts on the ground, and do so without the uncertainty that supposedly has been plaguing them.

Finished uncertainty! Unless, of course, “uncertainty” is just code for not giving up on the hope that politicians of both parties, as well as pundits, will continue to buy the evidence-free idea that general prosperity comes from corporations being kept fat and happy.